As a business owner, it’s your responsibility to ensure your institution doesn’t become a victim of fraud. Unfortunately, it happens more frequently than you think and it’s often not reported. Now you’re probably wondering which processes are the best for income verification.
Before working with another business or customer, it’s important that you confirm their financial situation. This will help keep you and your business safe.
This guide will give you all the information you need to know about collecting proof of income and important documents. Continue reading so you can keep your company safe and build professional relationships with other businesses.
1. Seek Trade References
Take the time to talk to other suppliers and companies in your area that have conducted business with the company in the best.
You can start by asking about their overall experience working with them. Be sure to ask if they were satisfied with the product or services that they offered.
Once you have that information, you can move on and talk about their financial standing.
Did the company that you’re considering working with make payments on time? Were they commutative about financial issues?
These questions will help you determine if you should work with them or if you should find another company to partner with.
If you are renting out your commercial space to a company, you should get with their previous landlord. This will make a big difference, as you can gain valuable knowledge.
Did they pay rent in a timely manner? Did the landlord ever have to threaten eviction? With these answers, you can decide if you want to lease your space to them or continue your search.
This is just the first step, you can’t stop here. The information you gather from others isn’t enough for you to make a decision.
2. Request Information Directly
This step requires a bit more work, but it will pay off in the end after you have income verification.
There are a lot of income documents that you’ll need to require from the company directly. Be sure to get all of it.
If a piece is missing, it may be a red flag. It could be a misunderstanding or it could indicate to you that you don’t need to work with them. It’s important that you are thoughtful about your decision.
Credit checks can be very informative. You’ll need to ask the company for permission first.
You’ll gain insight into their credit history and payment patterns. You’ll also have information about their overall financial status.
There are also business services that specialize in obtaining and analyzing credit checks specifically for businesses. This could be very eye-opening as there will be a lot of complied data.
In order to get an overall picture of the company’s financial health, you’ll need to request financial statements. This will include information about their income, cash flow, and balance sheets.
For larger companies, you may want to obtain an audited financial statement. This adds a little extra security for you and will give you peace of mind.
Review Tax Returns
Requesting tax returns from previous years will do the same as looking through financial statements. It will allow you to ensure everything is matching up.
Again, it’s just another way for you to keep your business safe from fraud and verify the income of the other company.
3. Work with Financial Professionals
Once you realize how much time and work, it takes to gather all the information above, you may be looking for an easier way to verify income.
Well, one of the best things you can do when you’re trying to confirm income verification is to work with professionals.
While you’re running your company, you may not have time to learn the ins and out of income verification, and that’s okay. There are experts who can do it for you and explain the process to you.
Working with accountants, financial advisors, or business consultants can ease your worries about fraud and other mishaps when you’re conducting transactions.
They will be able to provide you with information based on their expertise and give you recommendations.
Real-Time Bank Verification Service Benefits
There are several benefits that come when you work with verification services. The first is accurate and up-to-date information.
You won’t have to worry about the information being old or falsified. You’ll get verified information on the account, including the owner and transition history.
By validating and verifying the banking information, you’ll reduce your chances of being a victim of fraudulent activity. You can ensure the customers you’re conducting business with are honest about their current financial standing.
These services will also keep you from unknowingly conducting illegitimate business. You’ll be able to move forward with the business deal, knowing everything is within regulations. This reduces the risk of money laundering as well.
Using a creditable banking and income verification service can also lower administrative mistakes and saves you a lot of time and energy.
There are a lot of factors that contribute to a business deal. Forming a partnership with other lenders and financial institutions can be tricky.
It’s vital that you protect yourself so you don’t lose out on profits. Income verification is a big part of ensuring all parties involved as telling the truth.
Don’t wait to have peace of mind. Give us a call or book a demo today. Our team is ready to help you and your business thrive.